This paper aims at estimating the intergenerational earnings mobility for the most recent cohort in the labor force (i.e. people aged 25-34 in 2007). We also explore the role of education in promoting intergenerational earnings mobility. As pointed out by Becker and Tomes’ (1979), intergenerational mobility indicates to what extent the socioeconomic status is transmitted from one generation to the next. They also pointed out that such transmission is mainly mediated through investments on education. The basic method used here is using an OLS regression to estimate sons’ labor market earnings based on their fathers’ earnings. We further decompose the estimated intergenerational earnings mobility coefficient in to a part which is related to education and a part which is not. Using PSID data, we find a smaller estimate of the intergenerational earnings mobility for the most recent cohort than that for older cohorts as reported by previous studies. We also find that more than 70 percent of the transmission between father and son’s earnings is through the investment in education. In addition, using the transmission matrices approach, we find a pattern that the intergenerational earnings mobility is relatively low for people from the lowest and highest SES class, and relatively high for people in the middle. This pattern is consistent with previous studies. In sum, our study shows that the US society is more mobile now than it was before. Many previous studies pointed out that the US is less mobile than European countries, but our study suggests that the gap is now narrowed.

Yu, L. , Guo, F. and Gong, X. , 2011-04-30"Intergenerational earnings mobility for a more recent cohort in the US" Paper presented at the annual meeting of the 55th Annual Conference of the Comparative and International Education Society, Fairmont Le Reine Elizabeth, Montreal, Quebec, Canada<Not Available>. 2014-11-26 from http://citation.allacademic.com/meta/p493181_index.html

Publication Type: Conference Paper/Unpublished ManuscriptReview Method: Peer ReviewedAbstract: This paper aims at estimating the intergenerational earnings mobility for the most recent cohort in the labor force (i.e. people aged 25-34 in 2007). We also explore the role of education in promoting intergenerational earnings mobility. As pointed out by Becker and Tomes’ (1979), intergenerational mobility indicates to what extent the socioeconomic status is transmitted from one generation to the next. They also pointed out that such transmission is mainly mediated through investments on education. The basic method used here is using an OLS regression to estimate sons’ labor market earnings based on their fathers’ earnings. We further decompose the estimated intergenerational earnings mobility coefficient in to a part which is related to education and a part which is not. Using PSID data, we find a smaller estimate of the intergenerational earnings mobility for the most recent cohort than that for older cohorts as reported by previous studies. We also find that more than 70 percent of the transmission between father and son’s earnings is through the investment in education. In addition, using the transmission matrices approach, we find a pattern that the intergenerational earnings mobility is relatively low for people from the lowest and highest SES class, and relatively high for people in the middle. This pattern is consistent with previous studies. In sum, our study shows that the US society is more mobile now than it was before. Many previous studies pointed out that the US is less mobile than European countries, but our study suggests that the gap is now narrowed.